Kuwait: Back in Business

July 29, 1991

Resumption of oil shipments this weekend is the first good news from Kuwait since its liberation by allied troops last February. Nearly half the 600 oil well fires set by Iraqi soldiers are out, with 15 more extinguished each week. Slowly the facilities are being restored.

Kuwait's export resumption will start small at 140,000 barrels a day, rising to 400,000 barrels by New Year's, much less than the 2 million barrels daily before Iraq's invasion last August. It nonetheless symbolizes the start of a return to normal, both for the oil industry worldwide and for Kuwait as a city-state with a life and a purpose.

Kuwait's resumption of production coincides with United Nations Security Council consideration of permitting oil exports from Iraq, under supervision, to pay for food, medicine and repair of infrastructure. The return of these two entrants would signal to OPEC members who increased exports after the world boycott of Iraqi and Kuwaiti oil last August, that it is time to end their windfalls and return to normal production.

The likelihood is that this will exert downward pressure on prices. Oil activity has lured some Kuwaiti professionals home from exile, but the country has hardly returned to normal. Another positive sign is the announcement that the government plans to reorganize the banks next month, after more than $600 billion in looted gold is returned from Iraq under U.N. supervision.

The banking weakness dates from the 1982 crash of the unofficial stock exchange. Now the plan is to consolidate six state-controlled banks and some investment companies into four banks. Of 181 bank branch offices in tiny Kuwait before the invasion, 76 are open now, and that number may not go up. The unemployment is likely to be passed back to the home countries of foreign workers, which is a tragedy but not for Kuwait.

The harm that Saddam Hussein did is by no means undone, but life must go on. Politically, Kuwait still delays the return to pre-1986 participation that its people hope to see. But every step toward righting Kuwait and restoring its self-reliance is a welcome repudiation of Saddam Hussein's aggression and a load off the world's back.